Russell Kenley

An industrial organization economic supply chain approach for the construction industry: a review

Understanding industries in terms of the concepts of chains, clusters and networks is becoming increasingly important in economies around the world. Supply chain management for an individual organization is an emerging field of research in the construction management discipline, but less attention has been devoted to investigating the nature of the construction supply chains and their industrial organizational economic environment. This selected review of construction and mainstream management supply chain literature is organized around four themes; distribution, production, strategic procurement management and industrial organization economics, and highlights the need to develop an industrial organization economic supply chain framework for construction. The merging of the supply chain concept with the industrial organization model as a methodology for understanding firm conduct and industry structure and performance is an important contribution to both construction supply chain and construction economic theory. Much of the industrial organization supply chain literature has tended to focus upon manufacturing industries, where typically firms are permanent organizations. This raises issues as to the differences between industries founded upon temporary compared with permanent organizations. There is potential for the development of an industrial organization methodology applicable to the project based industry. Ultimately industrial organization research seeks to have direct implications for industry performance and government policies.

A construction project cash flow model—an idiographic approach

The paper introduces and supports the contention that an idiographic methodology is appropriate to the post- hoc study and interpretation of individual construction project cash flows. A cash flow model based on the logit transformation is proposed to be consistent with this methodology. The model is based on historical data, and yields two parameters to describe each individual project. The model is tested using two samples totalling 72 projects. Goodness of fit for the model, using a measure of standard deviation from 1.0% to 4.6%, with a median of 2.5%, is found for individual projects. The experimental hypothesis (that there is substantial variation between projects) is supported by the graphical and statistical evidence of deviation, which is argued to be the result of the individual ontology of each project - systematic error - rather than random error from an ideal. The paper concludes that forecasts of individual cash flows are invalid when derived from analysis of grouped data.

A service delivery approach to measuring facility performance in local government

This paper presents a new method for measuring facility performance that encompasses financial and non‐financial indicators. This method is the outcome of a pilot study conducted with a local government authority (LGA) in Melbourne, Australia. The service balanced scorecard takes a stakeholder approach to the setting of performance objectives in relation to the LGA’s key result areas, and then assesses facility performance balancing financial and non‐financial indicators. The service balanced scorecard takes into account four different perspectives of facility performance – the community, services, building and financial perspectives – resulting in a facility performance profile. While in this particular instance the service balanced scorecard was used in local government, the method may also be adapted for use in a corporate environment.

The sustainable competitive advantage model for corporate real estate

Purpose – This purpose of this paper is to propose a model for the relationship between corporate real estate management (CREM) practices and an organisations sustainable competitive advantage. Corporate real estate (CRE) plays an important but poorly recognised role in organisational competitiveness.Design/methodology/approach – The model was developed from the strategic management, organisational competitiveness, and CRE literatures. A total of 162 CREM practices from the literature were connected, where possible, with cost, innovation and differentiation sources of sustainable competitive advantage. Clustering similar practices allowed the summarising of competitive effects in those clusters and each of the sources of sustainable competitive advantage. Technical CREM practices were the focus of analysis as they constitute the traditional core of CREM.Findings – Many gaps were identified in the theoretical connections between practices and sources of sustainable competitive advantage. Overall, cost dom...

A construction project net cash flow model

This paper proposes a construction project net cash flow model based upon the logit transformation. The model was found to have an excellent fit to the data for 75 % of the projects analysed. The proposed model is a useful tool for the post hoc examination of construction project net cashflows. The model is very flexible and is capable of adapting to the wide degree of inter-project variability.

Location-based management of construction projects: part of a new typology for project scheduling methodologies

The domain of project scheduling has been treated as various disparate techniques, each competing to be the best method for effective planning and control of projects. Especially, there are many terms used to describe the family of construction scheduling methods which variously involve repetition, linear relationships, vertical or horizontal staging or in some other way map production units against time. This paper considers the underlying rationale behind those terms and proposes a new typology and terminology to encapsulate the entire family of scheduling methods and specifically to differentiate the family of production-oriented methodologies from the more common critical path methodologies. For this purpose the following terms are proposed: activity-based methodologies which may be divided into deterministic and probabilistic, and location-based methodologies which may be divided into unit production and location production. The paper then shows how location production in the location-based methodology involves focusing on locations as the unit of analysis and tasks as the unit of control as the framework for production management.

Process Dynamics: Identifying a Strategy for the Deployment of Buffers in Building Projects

ABSTRACT The management of uncertainty and complexity is necessary for improved performance in the management of operations. This paper examines lean production and its treatment of inventory and time buffers as waste. The minimisation of such waste improves operational flexibility and responsiveness, aiding the management of uncertainty and complexity. It is observed, however, that lean production also incorporates an alternative buffer, that of excess operational capacity, to provide further capability in the management of uncertainty and complexity Buffers are therefore considered necessary, and the concept of process dynamics is introduced to demonstrate their use in the management of uncertainty and complexity in operations Building projects require the provision of choice and variation (complexity) under conditions of considerable uncertainty. Strategies, such as process dynamics, that provide means of better accommodating, rather than eradicating uncertainty and complexity, can improve performance ...

Evaluating community facilities in local government: Managing for service enablement

Strategic management of facilities is now generally accepted best practice. Appraisal of facility performance has developed correspondingly and financial measures are no longer seen as the prime indicator of success. Holistic models that include the processes supporting fulfilment of an organisation’s strategic aims are now considered to provide more appropriate measures. Recent focus in the service‐oriented context of local government authority (LGA) facility management has particularly turned toward such models. This paper discusses the issues and inherent tensions arising from the strategic measurement of local government facilities in a service delivery context. It is argued that outwardly the strategic objective of service delivery is common to the private and public sectors, but fundamental differences in the desired outcomes and responsibilities of the two sectors require different solutions. Even if one accepts the current trend in ‘balanced’ performance measurement, differing parameters in the private and public sectors impact on the design and evaluation of performance measures, especially in relation to process, efficiency, strategy formulation and responsiveness of the organisation to customer needs. If a facility is considered to be an enabler of processes that lead to desired outcomes, these differences must necessarily affect the design of facility performance measurement tools. The research with eight LGAs, reported here, supports the need for a new model for the evaluation of community facilities applicable in the local government context. Using stakeholder‐based focus groups, the need was identified for a service‐oriented model, where the facility is understood as the intersection of aspects of service provision, physical building substance and the community utilising the facility.

Block models for improved earthwork allocation planning in linear infrastructure construction

Earthwork planning is considered in this article and a generic block partitioning and modelling approach is devised to provide strategic plans of various levels of detail. Conceptually, this new approach is more accurate and comprehensive than others, for instance those that are section based. In response to recent environmental concerns, the metric for decision making was fuel consumption or emissions. Haulage distance and gradient, however, are important components of these metrics and are also included. Advantageously, the fuel consumption metric is generic and captures the physical difficulties of travelling over inclines of different gradients, which is consistent across all hauling vehicles. For validation, the proposed models and techniques are applied to a real-world road project. The numerical investigations demonstrate that the models can be solved with relatively little CPU time. The proposed block models also result in solutions of superior quality, i.e. they have reduced fuel consumption and cost. Furthermore, the plans differ considerably from those based solely on a distance-based metric, thus demonstrating a need for the industry to reflect on its current practices.

Cash farming in building and construction: a stochastic analysis

Cash flow management is a significant issue in the management of a building or construction firm. This paper steps back from the well researched area of poor cash management and its relationship with failure, to focus on the funds which are generated through operations, and the positive benefits which can follow in a well managed organization. A stochastic model is developed which illustrates how an average of 16% of turnover can be available for reinvestment. This is sufficient to allow investment in non-liquid assets, provided that this is managed carefully and precautions are taken against a severe reduction in turnover. This level of funds is sufficient to encourage firms to enter the industry with the motivation of generating funds, rather than a desire to build. This has implications for large clients and for government when dealing with the industry.